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“Serving the Veterinary Profession Since 1981” Remillard From the desk of: Jim Remillard, MPA, CPC, CVPM 1971 American River Trail Cool, California 95614-2132 Management Associates, Inc. (RMA, Inc.) Co Founder & Member of the Board of Directors 2002-2005 2009 Distinguished Life Member Honoree 530.885.6113/Office 530.885.6159/FAX 530.308.8620/Mobile E- Mail: [email protected] SPECIAL PROJECT ASSOCIATES: Sandy Walsh, RVT, CVPM Jon Cunnington, MBA, CVPM Practice Valuation Questionnaire — CONFIDENTIAL — _____________, 2009 Dr. ________________ PRACTICE NAME Dear Dr. _______________: I am providing you with the following appraisal questionnaire to prepare a Valuation Report of your practice. This communication includes guidelines to assist you in providing me with the information needed to conduct a thorough financial evaluation of the practice that you want appraised. There may be some areas that are not appropriate for your situation, but please complete as many as you can. It is my understanding the practice is being appraised/valued for the purpose of determining a Fair Market Value as part of a feasibility study on the possible acquisition of this practice: “The price at which the Practice would change hands between a willing Buyer and a willing Seller, neither being under compulsion to buy or sell and both having reasonable knowledge of the relevant facts.” RMA, Inc. is not a real estate appraiser and will not make any Appraisal of the real estate. All valuations assume that the practice will remain in its present location and that it will continue to operate in substantially the same manner as of as of the date of valuation. RMA, Inc. will not be conducting any demographic studies or location suitability analysis. Additionally, RMA, Inc. is not rendering an opinion as to the likelihood of the practice continuing to RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 generate the level of income utilized in the valuation or the quality of the clientele or expenses incurred at any future date. The valuation to be prepared by RMA, Inc. is merely an opinion as to the Fair Market Value of the practice at a particular point in time – without any opinions or predictions as to the future performance of the practice. Please complete this entire questionnaire and submit all of the appropriate and requested information as soon as you possible can, along with the deposit that is specified in the latter pages of this engagement letter. RMA, Inc. will rely solely on information provided to us by you. We will not verify any of the information, data, financial statements, inventory reports, asset lists, accounts receivable reports, etc., that are provided to use for the purpose of preparing this valuation report. As such, the Valuation report that will be prepared should not be a substitute of a potential buyer to conduct a reasonable and thorough “Buyer’s Due Diligence” prior to offering to purchase the practice. Your responsibility is to use every reasonable effort to keep RMA, Inc. informed as to all pertinent developments and all of the facts surrounding the practice and the preparation of this report. In this regard, client acknowledges that RMA, Inc. is relying on information provided by you, and for this reason it is incumbent upon you to use every best effort to keep our office informed of any and all facts and information that have a bearing on the preparation of an accurate Valuation Report. 1) Please explain the purpose for which you are requesting this valuation. 2) An estimate of the fair market value of the following assets as of the most current month end. Please provide this date below: _________________________ _____, 200__ Drug & Professional Supply Inventory * Professional & Office Equipment** Furniture & Fixtures Leasehold Improvements: Date(s) improvements made: $ Value ____________________ ____________________ ____________________ ____________________ ____________________ Estimated life expectancy of improvements: Practice Vehicles Accounts Receivable Cash In Savings & Checking Accounts ____________________ ____________________ _______ Approx. __% collectable ____________________ Other Operating Assets ____________________ * Depending on the purpose of this valuation I will need either an estimate of the value of the historical or original cost of all drugs, medications (less obsolete and out-of-date items), — PAGE 2 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 supplies, laboratory supplies, surgical materials, kennel supplies and food, and over the counter sale items (sprays, powders, collars, shampoos, etc.), or an itemized inventory. Please separate the totals into medical and office supplies. ** At current fair market value. In other words if you needed to replace all of the equipment at the practice with similar equipment (same age, model, condition, use, etc.), what would it cost to do so. These assets will represent part of the tangible assets of the practice. Therefore, it is critical that the list be specific, detailed and accurate. Do not use "book value" (as reported on your Balance Sheet) or new equipment replacement cost. (Please see attached illustration) 3) An estimate of the fair market value of Practice real estate: (both land and buildings, separate and distinct from other ventures, buildings, or residences in proximity with the practice.) Veterinary Practice Real Estate Land Building $ Value ____________________ ____________________ When was the last appraisal on the property prepared? ___________________________ Who was the appraisal prepared by? ____________________________________________ If you own the property is it held personally, by a partnership or corporation? _____________________________________________________________________________ Are the property taxes included as an expense on the income statement, are they included in the rent, or do you pay them personally? ______________________________ If you lease the property please provide a copy of the lease agreement and any amendments that apply. What are the current and future lease terms and monthly lease payments? _____________________________________________________________________________ How is the lease rate determined: _______________________________________________ Status of facility: _____ Lease _____ Own personally or in partnership When constructed: _____ _____ Last remodeled Is any part of the practice sub-leased (groomer, pet store, etc.)? _____________________ (Please provide details and copy of any sub-lease) _____________________________________________________________________________ — PAGE 3 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 What type of structure is the facility, i.e. freestanding, shopping center, etc.? _____________________________________________________________________________ If you are not currently paying a fair market rent for the property where the practice is housed and had to lease a similar facility in your immediate geographic area, what do you think the monthly lease rate costs (excluding triple net costs) would be? Another way of posing this question would – If you sold the practice today and then had to lease back the facility to the new owner, what would the monthly lease rate cost be to the new tenant? $_____________________________________________________________ How many square feet is the hospital? _______________ AREA OF HOSPITAL: NUMBER APPROX. SQ. FOOTAGE Reception Exam Rooms Treatment Surgery Surgery preparation Radiology/Ultrasound Pharmacy Laboratory Kennel areas Large runs Bathing area Isolation Bathing Doctor’s office Business office Grooming Food preparation/storage Medical supply storage Conference room Living space Other (describe) How do you handle covering emergency calls? _____ Take own calls _____ Refer to emergency clinic — PAGE 4 — _____ Other RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 Please provide details ________________________________________________________ ____________________________________________________________________________ Are there any special zoning restrictions or building codes on the property? _____________________________________________________________________________ _____________________________________________________________________________ What type of maintenance and repairs do you feel are needed on the building at this time?_____________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ — PAGE 5 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 Other Real Estate proximate to the Veterinary Practice Real Estate (e.g. residential rental property next to practice real estate). Please describe below and indicate fair market value. $ Value ____________________ ____________________ Land Building Please provide us with the prior three years' tax returns & income statements (corporate, proprietorship, or partnership, whichever is applicable). Tax returns are acceptable alternatives if income statements are not available. If revenue is not broken out by category (i.e. professional services, vaccinations, radiology, etc., please provide a break out of revenue into at least the following categories: medical services, diets, retail, boarding, grooming, other ancillary services, discounts and refunds). If you have a monthly breakdown of gross income by month, for the past 60 months, we would also appreciate that analysis. In an effort to report a realistic financial view of the hospital’s performance, please provide a list of any personal or non-business expenses that have been included on the above income statements. Provide a brief explanation of each expense and to what income statement category it was charged. Also please list any unusual or one-time expenses that are included on these statements, along with a brief explanation of such expenditures. Is the practice a corporation ?________ C-Corp, S-Corp, LLC _________________ If a corporation, are shareholders selling stock or assets of the corporation?________ Sole Proprietorship? _______________ Partnership? _____________________ Accounting method: ___ Cash or ___ Accrual basis Fiscal year end? _______ Names of owners and percentage of ownership interest? ____________________________________________________ ______% ____________________________________________________ ______% ____________________________________________________ ______% ____________________________________________________ ______% — PAGE 6 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 In addition, please respond to these questions to be considered in valuation of your veterinary practice. PLEASE ANSWER EACH QUESTION IN DETAIL ON A SEPARATE SHEET FOR REFERENCED RESPONSES. 1) Were any gratuitous services provided by any person to the practice? (e.g. wife, children, parents, friends, etc. providing managerial, accounting, legal, construction, janitorial, lab or other services) If so, please state the estimated dollar value for these services for each of the four base years. 2) Adjustments to Income Statements. In order for RMA, Inc. to perform an accurate appraisal, we need to adjust the accountant’s or internally prepared profit and loss statements, from a “Tax oriented” to an “Economic” format, to reflect the true income generation of the practice. We will review the expenses to isolate any owner discretionary or non-operational (perks) (e.g. vacations, appliances for personal use, materials for construction of the doctor's residential property, and other personal expenses, etc.) Please list any specific financial benefits that the practice owner(s) receives in the following areas: Automobiles (purchase/lease, insurance, R & M, etc., Insurance (all forms), Retirement funds, Legal or accounting fees, Significant bartering, Free veterinary care of a substantial nature, etc. 3) Were any practice expenses paid individually on behalf of the practice but never deducted on annual federal income tax returns? If so, please itemize for each of the four base years. 4) Were any individuals paid in excess of their true economic value contribution to the practice? (e.g. wife or friend being compensated $500 per month for spending one hour each month reviewing the periodic practice results of operations for each of the four base years). If so, please state in detail their contribution to the practice, salary paid, fringe benefits received, etc. 5) What type of legal fees were deducted from practice gross income on the federal income tax returns? Please specify the nature and amount. Also, were any other professional fees deducted from practice gross income, which might be attributed to the doctor personally? (e.g. estate planning, personal financial planning, divorce, investment counsel, etc.) 6) What hours is the hospital open? ___________________________________________________________________________________ 7) Please detail separately, by doctor, the total production and compensation summary of each doctor who presently is an owner, partner, or staff doctor by each of the last four years. This schedule should conform to the last four years' tax return expenses claimed. USE — PAGE 7 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 THE WORKSHEET WE HAVE PROVIDED AS A GUIDELINE. If more than one DVM is involved, please use a separate worksheet for each DVM. 8) Do the principals engage in any activity not mentioned that may affect the economic realty of practice operations? If so, please explain fully. 9) Please include a SHORT history of the practice and the principals involved. Submit any information which you feel may be of use to use in completing this valuation. (year started and by whom, recent sale, merger, service format, number of veterinarians, etc.) Please indicate the type of practice that you conduct, giving percentages of each (if appropriate), such as, Small animal exclusive, small animal predominant, feline, avian, exotic, specialty, emergency/critical care, etc.) Please detail the answer to this question here, indicating percentages (as appropriate): _______________________________________________ ___________________________________________________________________________________ 10) Has there been any material change in the practice in the last five years which may affect the delivery of goodwill? (e.g. major building projects in the area, significant decline in the number of transactions, material decline in the practice neighborhood, entry of specialists in the practice, increase in the number of employee veterinarians in the practice, establishment of satellite facilities of the practice, commencement of emergency clinic operations in the area, etc.) 11) Is the practice in compliance with all Federal, State and Local OSHA standards? 12) Please provide a list of all employees of the practice that details date of hire, current compensation rate, fringe benefits provided, etc. 13) If available, please detail for each base year the number of transactions per year, the dollars per transaction, the number of veterinarians in the practice for each base year, your estimate or actual count of the practice's patient records, the average hours per week that the doctors work, and the number of full and part-time support staff by year. BASE YEARS # Transactions/Year # New Client Visits/Yr. Avg. Transaction Fee Number of DVM’s #Active Client Records #Active Patient Records 2009 __________ __________ __________ __________ __________ __________ 2008 _________ _________ _________ _________ _________ _________ — PAGE 8 — 2007 _________ _________ _________ _________ _________ _________ 2006 _________ _________ _________ _________ _________ _________ RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 Hours/Week DVM’s Work __________ _________ _________ _________ How many full-time Equivalent DVM’s were needed to cover practice during base years? Support Staff #: Full Time Part Time __________ _________ _________ _________ __________ __________ _________ _________ _________ _________ _________ _________ Worker’s Compensation Rate for Current Year: _________ — PAGE 9 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 REVENUE SUMMARY BY MONTH: MONTH YEAR _______ Jan. Feb. March April May June July August Sept. Oct. Nov. Dec. TOTALS YEAR ________ YEAR _______ YEAR ________ YEAR _______ TRANSACTIONS SUMMARY BY MONTH: MONTH Jan. Feb. March April May June July August Sept. Oct. Nov. Dec. TOTALS YEAR _______ — PAGE 10 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 NEW CLIENTS SUMMARY BY MONTH: MONTH Jan. Feb. March April May June July August Sept. Oct. Nov. Dec. TOTALS YEAR _______ YEAR ________ YEAR _______ 14) What type of promotional and/or marketing activities does the hospital engage in? Please provide copies of your brochure, newsletters and any other such practice promotion materials. ___________________________________________________________________________________ ___________________________________________________________________________________ ___________________________________________________________________________________ 15) How many other practices (similar to the one being appraised) are located within a 3, 5 and 10-mile radius of your hospital (excluding your own)? 3-mile distance: _____________ 5-mile distance: _____________ (including those in 3-mile distance response) 10-mile distance: ____________ (including those in the 3 and 5 mile distance answers) 50-mile distance: ____________ (answer for specialty practices only) 16) Please provide us with a listing of all practice liabilities — which should include the purpose of the note, the remaining balance, the monthly payment and the interest rate(s). 17) Area map marked with location of the practice. Highlight other practices in the immediate proximity to your practice (3 to 5 miles in urban; 5 to 10 in more suburban or rural areas). Have any new practices been established within your immediate practice area in the past 2-3 years? If so, please provide details?____________________________________________ 18) Photographs, VCR tape or DVD of the practice facility and surrounding area. This should include all rooms and storage areas, equipment, front, sides and rear of facility, — PAGE 11 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 outside sign, kennel areas — and any other specific information about the commercial, service or trade area. 19) Yellow Page Advertising. Please send copies of your ad, as well as the ads for your immediate colleagues (neighboring practices). 20) Does anyone have an option to purchase any part of this practice? ___________________________________________________________________________________ 21) Are there any environmental issues surrounding your practice? ___________________________________________________________________________________ 22) Are you, the hospital or any employee or other related party involved in any lawsuit that effects the practice? ___________________________________________________________________________________ 23) Are there any current or past employee claims against the practice pending? ___________________________________________________________________________________ 24) Contact Information. Please provide the following methods of reaching you at and away from the practice: Home: (___) ____________________ Practice: (___) __________________ E-mail: _________________________ FAX: (___) ____________________ Inside line: (___) ________________ Mobile or Pager: ________________ Website Address: _______________ 25) As of what date would you like the practice to be appraised? ____________________ 26) Has this practice ever been appraised before? __________________________________ By who and when? _________________________________________________________________ 27) Name of practice’s attorney: __________________________________________________ Address: __________________________________________________________________________ Telephone & Fax Numbers: __________________________________________________________ e-Mail: ____________________________________________________________________________ — PAGE 12 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 28) Name of practice’s accountant: ________________________________________________ Address: __________________________________________________________________________ Telephone & Fax Numbers: __________________________________________________________ e-Mail: ____________________________________________________________________________ After we have received responses to these questions, we will contact you if further information is needed. Our hourly fee for appraisal services rendered is billed at $225, plus any associated travel and/or out of pocket expenses — such as phone message units, fax transmissions, copies of appraisal report, etc. Our base fee range for a complete practice appraisal on a single practice runs between $4,000 to $6,500. A few appraisal reports, because of their complexity, contentiousness, lack of agreement on the use of certain asset items, etc., can exceed the $6,500 estimate. This type of valuation report is appropriate for practices that are being sold completely, partial associate sale, partnership dissolution, divorce, etc. Should you desire a more “scaled down” – valuation estimate report, to be used for purposes not requiring the specificity, detail and full-on accuracy of a thorough practice valuation, you might want to consider having an appraisal estimate report completed. This cost structure usually runs in the $2,000 to $3,500 range – about half of a full-scale report. The basic hourly rate for completing either appraisal approach is $225.00 per hour – as of May 1, 2009. Please include a retainer deposit for 50% of the mid point in either of the above options ($2,000 for the estimate report and $3,500 for the full valuation report) with your materials. The remaining amount is due upon completion of the appraisal. Special Note for Potential Buyers of a Veterinary Practice: If this valuation is for the purpose of evaluating the suitability of purchasing a veterinary practice then a scaled down version of a complete appraisal report would occur. This service is charged at the hourly rate of $195, and the client should expect that such an analysis will take between 6-15 hours to complete. This would result in a projected cost range of between $1,500 to $3,000, to take the potential buyer up to the point of deciding whether to make an offer to purchase the practice, and at what level. The range of time associated with this type of project is primarily predicated on the quantity, completeness, timeliness, accuracy, cooperation of the seller, and usability of the information that is requested by the appraiser. Itemized statements of RMA, Inc.’s time devoted to this project will be sent to you at the end of each monthly billing cycle. Any amount due as a result of such billing, less any deposit amount already provided to RMA, Inc. is due by the 10th of month following the submission of the statement to the client. If the amount due is not paid by the 15th of the month following — PAGE 13 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 billing, the unpaid amount shall bear interest at the maximum interest rate allowed by California law until paid in full. The majority of our evaluation work can be accomplished by telephone, with you visiting our office, and through the mail. However, we will travel to the practice, upon your request or if I feel that it is necessary to produce a report with the highest level of accuracy. Any such additional costs for visiting the practice would be at your expense and would be charged out in accordance with the attached fee schedule. A complete tape-recorded VCR (16 or 8mm, digital or analog) or DVD presentation of the grounds, the facility and equipment is desired and in most cases is sufficient to produce an appraisal report without visiting the practice. In some instances, however, a physical review of the practice is necessary. If you should have further questions about anything included in this note or during our telephone conference call today, please call. — PAGE 14 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 Jim Remillard, MPA, CPC, CVPM Practice Management Consultant/Practice Valuator Remillard Management Associates, Inc. 1971 American River Trail Cool, CA 95614-2132 530.885.6113/Office — 885.6159/Fax e-mail: [email protected] — PAGE 15 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 CHECK LIST OF ITEMS TO BE RETURNED TO RMA, INC.: Accounts Receivable Summary (Estimate percent of total that you feel is collectable: _____%) Valuation Questionnaire (completed) Mid Range Blue Book Value of Practice Vehicles (if appropriate) Consulting Agreement (if none currently on file) Corporate Buy-Sell Agreement (if requested) Current Lease Deposit (as requested above) Fee Schedule (current) Financial Statements — Including Balance Sheet for past 3 years Financial Statement for Current Year in Progress Tax returns (federal only) for the past 3 years: For sole proprietor: Schedule C If partnership: Form 1065 If C Corporation – Form 1120 If S Corporation – Form 1120S (With all pertinent schedules for each business type) Inventory Listing of Medical, Surgical, Office & Computer Equipment Practice Rating Form (last page of this document) Practice Brochure & Written Marketing Pieces & Information Partnership or Shareholder Agreement (if requested) Video Tape of Facility: Inside and Out (narrated, if possible) Listing of Practices in the Area (placed on a map, if possible) Offer for Sale of Practice You Are Considering Selling (if applicable) List of all employees, indicating name, date of hire, position, salary, etc. Include employment agreements for doctors or any managerial/administrative staff Listing of all current leases, short and long-term practice notes details (origination date, terms and conditions, current balance, number of remaining payments, disposition of equipment at end of lease, etc. — PAGE 16 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 CONSENT TO RELEASE DETAILS OF SALES TRANSACTION TO AVPMCA NATIONAL MARKET DATA BASE OF SALES AUTHORIZATION: I agree to allow many of the details of the transaction involving an eventual sale of my practice to be included in the Market Database of Sales that is being developed and maintained by the Association of Veterinary Practice Management Consultants and Advisors (AVPMCA). I understand that such information will be entered into this important national database in a manner that keeps the identity of my/our practice anonymous. The information that will be entered includes, among other items, (a) the sale date, (b) type of sale, (c) location within the USA based on AAHA’s five regions, (d) price for the sale, (e) terms of the seller’s restrictive covenant, (f) whether real estate was involved and, if so, sales price of the real estate, (g) type of business entity sold, (h) terms for financing the transaction, and (i) the value established by any appraisal(s) that were completed on this business. I understand that anonymous means that no specific details will be listed by practice name, hospital or clinic owner, or specific practice location. __________________________________________________________________________________ PRACTICE OWNER/AUTHORIZED REPRESENTATIVE DATE RMA, INC. POLICY REGARDING REFERRAL FEES We want you to know that the policy of our firm and all of its associates, is that we will not request or accept any referral or finder’s fees, or any other type of financial remuneration for the benefit of our firm in the course of our consulting relationship with you. This has always been our policy and you have our assurance that it will remain in effect for as long as we provide practice management consultations and services. Some consultants and advisors do accept such fees for referrals or recommendations to use various services and/or products offered by other service providers. We feel that it is important to share this policy statement with you so that: 1. You can inquire about and ask for clarification of the referral fee policies of all firms before hiring them, and 2. You are aware that this is the only way we feel we can avoid the potential for or appearance of any conflict-of-interest. The owners and staff of: Remillard Management Associates, Inc. Cool, CA — PAGE 17 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 WORKSHEET TOTAL PRODUCTION AND COMPENSATION SUMMARY OF EACH DVM WHO IS EMPLOYED OR IS AN OWNER AT THE PRACTICE: DOCTOR'S NAME: _________________________________________________________________________ NUMBER OF YEARS EMPLOYED IN THIS PRACTICE: ________________________________________ NUMBER OF DAYS PER WEEK (ON AVERAGE) THAT DOCTOR IS ON STAFF: _______________ DO YOU CONSIDER THIS DOCTOR TO BE FULL-TIME (4-5 days or shifts per week) _____________ IF LESS THAN F-T, WHAT DO YOU CONSIDER HIS/HER FULL TIME EQUIVALENCY? _________ ANY BOARD CERTIFIED SPECIALTIES: YES _______________ NO ______________________ WHAT SPECIALTY/DISCIPLINE? _______________________________________________________ DID THIS PERSON SIGN A NON-COMPETE AGREEMENT? YES _________ NO __________ (Not permissible for associate DVM’s in California) 2009 __________ 2008 __________ 2007 __________ 2006 __________ Individual Annual Production ___________ ___________ ___________ ___________ Average Doctor-Client Charge ___________ ___________ ___________ ___________ Base Salary (Yearly) ___________ ___________ ___________ ___________ Production Incentives (___% paid) ___________ ___________ ___________ ___________ Other Bonuses ___________ ___________ ___________ ___________ Payroll Taxes ___________ ___________ ___________ ___________ Medical Expense Reimbursement ___________ ___________ ___________ ___________ Medical Insurance ___________ ___________ ___________ ___________ Life Insurance ___________ ___________ ___________ ___________ Continuing Professional Education ___________ ___________ ___________ ___________ Travel & Entertainment Expense ___________ ___________ ___________ ___________ Pension/Profit Sharing ___________ ___________ ___________ ___________ $ Value of Free Pet Care ___________ ___________ ___________ ___________ Other Fringe Benefits of a More Creative Mode: ________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ __________________________________________________________________________________________ — PAGE 18 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 — _____________________________ — Estimates of annual return (Net Profit) are considered to be worth 1 to 5 times its calculated value. This rating form helps to identify the rating factor in determining the market value of this practice. 1. Number of years the practice has been in existence: 1 = 2 years or less 2 = 3-4 years 3 = 5-6 years 4 = 7-8 years 5 = 9 years or more _____ 2. Competitive situation: 1 = many other practices in area, market glutted 2 = above average number of practices 3 = normal competitive situation 4 = below average 5 = no other practice in area _____ 3. Degree of risk (potential business failure): 1 = extremely high 2 = high 3 = normal 4 = low 5 = extremely low _____ 4. Growth of practice in the past 3 years: 1 = rapid decline 2 = below inflation by 5% or more 3 = at or near inflation 4 = above inflation 5 or 10% 5 = very high _____ 5. Location: l = location inhibits practice 2 = below average 3 = average 4 = above average 5 = unique location _____ 6. Overall desirability of the practice to a potential buyer: 1 = minimum to none 2 = low 3 = normal _____ — PAGE 19 — RMA, Inc. Practice Valuation Report Information Questionnaire — 5/14/2017 4 = high 5 = very high TOTAL Divide the Total by 6 to arrive at multiplier = — PAGE 20 — _____ _____